Commercial Rents (Coronavirus) Bill

The Commercial Rents (Coronavirus) Bill of the Parliament of the United Kingdom aims to help commercial landlords and tenants in resolving rent arrears that have arisen as a result of the COVID-19 pandemic.

Background

During the COVID-19 pandemic, many businesses were mandated to close in full or in part by Government. At the same time the government introduced an eviction moratorium and protection for thousands of commercial tenants. As a result, many businesses have accrued debts, estimated to be over £6bn as of March 2021, As the restrictions ended on July 18th 2021, and in an effort to protect a large number of businesses from eviction and reduce the number of jobs at risk of insolvency, regulatory intervention has been proposed for England and Wales.

The bill was published on Nov 9th 2021

The bill gives protection for those operating under a businesses tenancy from rent debt recovery, and if no agreement can be reached, that the matter can then be resolved by arbitration.

The arbitration award can alter the principle sum owed under a business tenancy and give business tenants time to pay (up to 24 months). The act also proposes to alter the Arbitration Act 1996 under Schedule 1 of the bill.

New legal terms introduced

"Protected Rent Debt", which is defined as being (as well as rent) the interest, services, and insurance charged to a tenant that accrued during the relevant periods below.

"Relevant period", which is defined as being, from 2 pm March 21st, 2020 up to 11.55 pm 18th July 2021 (ENGLAND only) 6 am 7th August (2021 WALES only)

"Adversely affected by Coronavirus", which is defined as, occurring during a "relevant period" and that any part of the business or the premises was subject to a closure requirement, it is not necessary for the whole building to have been closed.

The bill also outlines the period of time (6 months) in which either a Landlord or Tenant can make a reference to arbitration.